The Insolvency Service has been consulting with professionals within the industry in consideration of emergency legislation to reform current insolvency law. This has been reported to include:
- a moratorium on winding up and bankruptcy petitions;
- disallowing claims being brought for wrongful trading; and
- an extension of the moratorium period given when filing a notice of intention to appoint administrators.
The new legislation is being proposed to allowing directors more protection during this period and to prevent viable businesses from collapse resulting in unnecessary damage to the economy.
"The government is also considering what emergency legislation could be introduced to help struggling businesses, and we are very grateful to our stakeholders that have taken time to get in touch and propose possible measures", the Insolvency Service said in a notice to the profession. "We are also working closely with other government departments on what measures short of legislation might help." The German government has already introduced emergency laws to ban winding-up petitions during the COVID-19 crisis.